2014 (2) TMI 683

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....ion of Rs. 18,94,555/- made u/s. 80P(2)(a)(i) of the Act on account of deduction claimed u/s. 80P(2)(a)(i) & 80P(2)(d) without appreciating the fact that as per sub section(4) of Section 80, the scope of deduction has been restricted to only Primary Agricultural Credit Society and Primary Co-operative Agricultural and Rural Development Bank." 3. In all the cases identical grounds have been taken by the revenue. 4. The AO observed in case of Meghraj Taluka Primary Teachers Cooperative Credit Society that assessee had shown gross total income at Rs. 18,94,555/- which has been claimed as deduction u/s. 80P(2)(a)(i), 80P(2)(a)(c) and 80P(2)(d) of the IT Act. The AO denied the deduction u/s. 80P on the ground that as per section 2(24)(viia....

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....and rural development bank, therefore he denied the deduction u/s. 80P(2)(a)(i) and 80P(2)(d). 5. Similar findings were given by the AO in all the cases. 6. The assessee being aggrieved by the order of AO went before CIT(A) who had allowed the appeal by considering the submission of the assessee and ratio in case of ITO vs. Sri Rama Co-operative Bank Ltd in ITA No. 1182/Bang/2010 for A.Y. 2005-06, Jafari Momin Vikas Cooperative Society Ltd in ITA No. 1491/Ahd/2012 for A.Y. 2009-10, ACIT vs. M/s Bangalore Commercial Transport Credit Co-op Society Ltd in ITA No. 1069/Bang/2010 order dated 8th April 2011, DCIT vs. Javalakxmi Manila Vividodeshaqala Soudharda Saharkari Ltd in ITA No. 1to3/Pnj/2012 and 4to6/Pnj/2012 dated 30-03-2012, Totgar....

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.... contentions and perused the material on record and facts of the case are identical in all appeals of the revenue. The issue is whether co-operative society providing credit facilities to its members covered in sub-section (4) of section 80P or not. The assessee is in the business of providing credit facility to its member and accepting the deposits from the member. The Hon'ble Gujarat High Court in case of Jafari Momi Vikas Credit Society is as under:- "7. From the above, it is clear that the income of the assessee is eligible for deduction under Section 80P(2)(a)(i) since the only activity of the assessee is to provide credit facility to the members and therefore the interest earned from short term deposits is business income and is el....